Defendant pleads guilty in city Land Bank scheme

FBI agents converged on the City-County BuildingÕs 20th floor offices of the Indianapolis Department of Metropolitan Development investigating the Indy Land Bank Tuesday, May 21, 2013. Danese Kenon/The Star

A former Indianapolis city employee has pleaded guilty to wire fraud in an alleged scheme to reap kickbacks from the sale of abandoned properties.

John Hawkins, once a project manager for the Department of Metropolitan Development, entered a guilty plea before U.S. District Judge William Lawrence in Indianapolis Wednesday.

A date for sentencing has not been scheduled. but Hawkins faces up to 20 years in prison. He was released on his own recognizance, said Tim Horty, a spokesman for the U.S. Attorney’s office.

Hawkins was one of five defendants accused of illegally profiting from property run by the Indy Land Bank, which was set up to improve vacant and abandoned homes.

Reggie Walton, who ran the Land Bank, is also charged with wire fraud and faces trial before Lawrence on Sept. 22. The Federal Bureau of Investigation raided the DMD offices at the City-County Building, 200 E. Washington St., in May 2013, carting away a truckload of documents.

Prosecutors say Walton and Hawkins sold the Land Bank property cheap to non-profit groups, which then sold them at a premium to investors. The non-profits then shared the proceeds with Walton and Hawkins, prosecutors say.

The non-profit middlemen charged are David Johnson, Randall Sargent and Aaron Reed.

Johnson was executive director of the Indiana Minority AIDS Coalition, Sergeant, owner and president of New Day Residential Development and Reed is Walton’s friend.

No trial dates have been set for those three.

Call reporter John Tuohy at 444-6418 and follow on Twitter @john_tuohy.